Facebook indicated in its IPO statement Thursday that it is still entertaining hopes of entering the Chinese market, but analysts said it is unclear whether the social network giant can overcome its Chinese rivals if it does establish a presence in the country.
The California-based company took its first step to becoming a publicly traded company in an undetermined stock market after filing its registration statement Thursday with the aim of raising $5 billion in an initial offering of stock.
In its statement to the US Securities and Exchange Commission, Facebook expressed its continuing interest in a share of the Chinese market, where it is currently inaccessible to Web users.
"We continue to evaluate entering China," said the document. "China is a large potential market for Facebook."
However, the company says regulations in China still pose some difficulties for its entry.
Facebook had 845 million users as of December 31, 2011, but in China it has "near zero percent penetration," according to the paper.
Facebook CEO Mark Zuckerberg visited Chinese Internet giants Sina and Baidu in Beijing in late 2010, a move observers believed could be an attempt to explore the possibility of entering China or cooperating with Chinese partners.
Whether the popular website can compete with its Chinese counterparts, which have developed rapidly, is another major challenge.
"We would also face competition from companies in China such as Renren, Sina and Tencent in the event that we are able to access the market in the future," said the document.
Lü Benfu, professor with the Graduate University of the Chinese Academy of Sciences, said that there are still no companies in China that have the same model as Facebook.
"A combination of the microblogging services of Sina and Tencent would result in something similar," he said during an interview with Sina Weibo, adding that Facebook would not necessarily defeat local Chinese local companies if it eventually makes an appearance here.
Earlier hopefuls such as eBay and Amazon have already been outrun by local competitors such as Taobao, of Alibaba. Google had a much lower local market share than Chinese search giant Baidu when it closed its Chinese website Google.cn in 2010, in a protest against content regulation.
Wei Wuhui, an expert on Internet and new media, who was previously the chief operational officer of blog website BlogBus, expressed his optimism about Facebook's market prospects in China.
"Though Renren, Sina Weibo and other Chinese products have taken a majority of market share, Facebook can still gain a foothold by virtue of its vast third-party applications and collaboration with millions of websites," Wei told the Global Times.
Wei noted that Facebook had also developed very advanced profit models, which domestic sites lack.
"Facebook's success in the Chinese market lies in its market strategy, which should adapt to China's special policies," said Jia Jinghua, an IT commentator. He told the Global Times that Facebook does not need to worry about its recognition in China.
"If it provides a brand-new user experience and creates unique value for Chinese Internet users, it will gain popularity."